Stemcor Says Lenders Support $2.25 Billion Restructuring PlanStephen Morris
Stemcor Holdings Ltd. said its creditors voted to approve the U.K. steel trader’s plan to restructure its debt.
Lenders voted “overwhelmingly” in favor of the plan, according to Charles Armitstead, a spokesman for Stemcor employed by Pendomer Communications LLP. The debt deal, which includes converting $1.1 billion of credit facilities into term loans and borrowing an additional $1.15 billion, will be taken to a U.K. court for approval this month, he said.
Stemcor is reorganizing its debt because it failed to repay an $850 million credit line last year after reporting a loss in 2012 amid lower demand for steel. It replaced chairman Ralph Oppenheimer last year with restructuring specialist John Soden and is seeking to raise funds by selling assets in India.
A U.K. judge last month ordered lenders to vote on the proposal as part of a legal process known as a “scheme of arrangement,” which typically requires the backing of 75 percent of creditors. Lenders to both Stemcor’s $850 million credit line and a $225 million facility borrowed by its Singapore unit backed the restructuring proposal, Armitstead said.
Stemcor plans to use cash and proceeds from disposals, including its operations in India, to pay down the term-loan debt, the company told the court.